The value of assets under management (AUM) in the Middle East has recovered following a decline in 2015 and 2016 and is expected to rise further as energy prices rise.
According to Preqin, a privately-held UK-based investment data company, AUM in the region has been consistently on the rise since the end of 2019, rising by 52 percent.
The region’s AUM reached $35 billion in the third quarter of 2021, surpassing the $25 billion recorded in 2020.
Among the key markets in the region, the UAE, and Saudi Arabia continue to account for the largest share of AUM.
Saudi Arabia has been increasing its share of Middle East-based AUM, which has jumped from 11 percent in 2014 to 24 percent as of the third quarter of last year.
Higher oil and gas prices have been a boon for the region’s AUM, with the recent price increases driving private capital’s improved fortunes in the Middle East.
According to Peqin, the current period of increased revenues from commodity exports into private industry and government coffers could create opportunities to speed up economic diversification efforts.
The trend could change in the long term due to a greater push for lower reliance on imported hydrocarbons. “The ongoing conflict in Ukraine alongside the continued post-pandemic economic resurgence is pushing commodity prices higher, creating short-term opportunities,” Peqin’s report stated.